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The Russian government’s fresh attempts to attract foreign expertise and investments could mean that British major BP can get another chance to explore the country’s Arctic reserves. Last year, BP’s deal with Russian state producer Rosneft was cancelled because of complications regarding the company’s existing partnership with TNK.

Rival Exxon Mobil capitalized on BP’s loss to enter into a partnership with Rosneft that will provide the company access to blocks that are expected to hold more than 30 billion barrels of oil. Now Rosneft has invited TNK-BP to participate in exploration projects in the Arctic region. [1] Over the past few years, BP’s output levels for projects outside Russia have seen a steady decline.

Despite a few corporate issues with regard to the functioning of TNK-BP, the Russian subsidiary contributes to almost 40% of BP’s global oil output. While BP’s output from other geographies has fallen because of divestments and natural decline in fields, TNK-BP has increased its oil and gas output over the last year boosting BP’s overall results. Now, TNK-BP is among the four private players invited by state player Rosneft to set up partnerships in order to explore the challenging and technically complex Arctic waters.

The latest move from Rosneft follows a series of maneuvers by the Russian government to attract foreign players to explore its Arctic reserves. The country has reduced its tax rates on oil companies and made other guarantees to foreign players as well.

The joint venture between Rosneft and Exxon is expected to begin exploration by 2014. A possible future deal could boost BP’s long term output levels and provide it with new resources to replace its aging fields. BP has reported a fall in total output over the past several quarters, as new production from deepwater fields in Angola and the North Sea has been offset by natural decline in fields and the sale of assets to finance the spill costs related to the Gulf of Mexico incident.